Byline Bancorp, Inc. Reports Second Quarter 2023 Financial Results

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Select Second Quarter 2023 Financial Highlights

  • Net income of $26.1 million, or $0.70 per diluted share

  • Pre-tax pre-provision return on average assets of 2.23%1

  • Return on average assets of 1.41%; Return on average tangible common equity of 16.78%1

  • Net interest margin of 4.32%

  • Efficiency ratio of 52.92%

  • Total loans and leases of $5.6 billion, quarterly increase of $55.2 million

  • Total deposits of $5.9 billion, quarterly increase of $104.4 million

  • Tangible Common Equity to Tangible Assets of 8.87%1

  • Common Equity Tier 1 to Risk Weighted Assets of 10.58%

CHICAGO, July 27, 2023--(BUSINESS WIRE)--Byline Bancorp, Inc. ("Byline", the "Company", "we", "our", or "us") (NYSE: BY), the parent company of Byline Bank (the "Bank"), today reported net income of $26.1 million, or $0.70 per diluted share, for the second quarter of 2023 compared with net income of $23.9 million, or $0.64 per diluted share, for the first quarter of 2023, and net income of $21.8 million2, or $0.58 per diluted share, for the second quarter 2022.

Roberto R. Herencia, Executive Chairman and Chief Executive Officer of Byline Bancorp, Inc., commented, "We reported solid results for the second quarter and continued to execute our time tested strategy well. Notwithstanding the challenging operating environment, our business units continued to perform well and we have good momentum heading into the second half of the year."

Alberto J. Paracchini, President of Byline Bancorp, Inc. added, "We delivered record earnings, strong profitability, balanced deposit and loan growth and solid credit quality. Our strong capital and liquidity levels position us well to continue to prudently grow our franchise."

Board Declares Cash Dividend of $0.09 per Share

On July 25, 2023, the Company's Board of Directors declared a cash dividend of $0.09 per share, payable on August 22, 2023, to stockholders of record of the Company's common stock as of August 8, 2023.

Inland Acquisition

On July 1, 2023, Byline completed its acquisition of Inland Bancorp, Inc. ("Inland Bancorp") to solidify Byline's position as Chicago's largest community bank. The transaction brings Byline’s combined total assets to approximately $8.8 billion, $6.4 billion in loans and $6.9 billion in deposits, with 47 branches across the greater Chicago metropolitan area, based on information as of June 30, 2023.

(1)

Represents non-GAAP financial measures. See "Reconciliation of non-GAAP Financial Measures" for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.

(2)

Recast due to the adoption of ASU 2016-13 Financial Instruments - Credit Losses on December 31, 2022, which was applied retrospectively to January 1, 2022. Results for periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are recast as if the new standard had been applied since January 1, 2022. Refer to our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the adoption of the standard.

STATEMENTS OF OPERATIONS

Net Interest Income

The following table presents the average interest-earning assets and average interest-bearing liabilities for the periods indicated. Net interest income and margin are adjusted to reflect tax-exempt interest income on a tax-equivalent basis using tax rates effective as of the end of the period:

For the Three Months Ended

June 30, 2023

March 31, 2023

Recast June 30, 2022

(dollars in thousands)

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

Average
Balance(5)

Interest
Inc / Exp

Avg.
Yield /
Rate

ASSETS

Cash and cash equivalents

$

135,003

$

1,041

3.09

%

$

97,578

$

442

1.84

%

$

66,034

$

74

0.45

%

Loans and leases(1)

5,535,593

99,134

7.18

%

5,484,372

92,343

6.83

%

5,007,615

59,919

4.80

%

Taxable securities

1,250,780

6,324

2.03

%

1,275,377

6,431

2.04

%

1,331,136

5,792

1.75

%

Tax-exempt securities(2)

151,205

980

2.60

%

151,817

994

2.65

%

168,567

1,131

2.69

%

Total interest-earning assets

$

7,072,581

$

107,479

6.10

%

$

7,009,144

$

100,210

5.80

%

$

6,573,352

$

66,916

4.08

%

Allowance for credit losses - loans and leases

(92,804

)

(84,321

)

(72,521

)

All other assets

424,122

420,328

465,733

TOTAL ASSETS

$

7,403,899

$

7,345,151

$

6,966,564

LIABILITIES AND STOCKHOLDERS’
EQUITY

Deposits

Interest checking

$

541,036

$

2,175

1.61

%

$

606,008

$

2,494

1.67

%

$

615,831

$

415

0.27

%

Money market accounts

1,534,463

10,799

2.82

%

1,465,677

7,728

2.14

%

1,307,320

1,194

0.37

%

Savings

575,254

220

0.15

%

613,590

227

0.15

%

664,954

83

0.05

%

Time deposits

1,328,679

11,529

3.48

%

966,409

5,849

2.45

%

627,199

436

0.28

%

Total interest-bearing deposits

3,979,432

24,723

2.49

%

3,651,684

16,298

1.81

%

3,215,304

2,128

0.27

%

Other borrowings

509,419

4,241

3.34

%

573,433

5,852

4.14

%

497,082

1,083

0.87

%

Federal funds purchased

—

—

0.00

%

2,778

36

5.30

%

2,527

14

2.32

%

Subordinated notes and debentures

111,255

2,142

7.72

%

111,101

2,098

7.66

%

110,649

1,694

6.14

%

Total borrowings

620,674

6,383

4.12

%

687,312

7,986

4.71

%

610,258

2,791

1.83

%

Total interest-bearing liabilities

$

4,600,106

$

31,106

2.71

%

$

4,338,996

$

24,284

2.27

%

$

3,825,562

$

4,919

0.52

%

Non-interest-bearing demand deposits

1,848,538

2,076,613

2,265,426

Other liabilities

148,983

145,253

105,918

Total stockholders’ equity

806,272

784,289

769,658

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

7,403,899

$

7,345,151

$

6,966,564

Net interest spread(3)

3.39

%

3.53

%

3.56

%

Net interest income, fully taxable equivalent

$

76,373

$

75,926

$

61,997

Net interest margin, fully taxable equivalent(2)(4)

4.33

%

4.39

%

3.78

%

Less: Tax-equivalent adjustment

207

0.01

%

208

0.01

%

237

0.01

%

Net interest income

$

76,166

$

75,718

$

61,760

Net interest margin(4)

4.32

%

4.38

%

3.77

%

Net loan accretion impact on margin

$

611

0.03

%

$

729

0.04

%

$

1,628

0.10

%

(1)

Loan and lease balances are net of deferred origination fees and costs and initial indirect costs. Non-accrual loans and leases are included in total loan and lease balances.

(2)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, using a federal income tax rate of 21%.

(3)

Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4)

Represents net interest income (annualized) divided by total average earning assets.

(5)

Average balances are average daily balances.

The following table presents net interest income for the periods indicated:

June 30, 2023

Three Months Ended

Change from

Recast

June 30,

March 31,

June 30,

March 31,

June 30,

(dollars in thousands)

2023

2023

2022

2023

2022

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$

99,134

$

92,343

$

59,919

7.4

%

65.4

%

Interest on securities

6,559

6,600

6,264

(0.6

)%

4.7

%

Other interest and dividend income

1,579

1,059

496

49.1

%

218.7

%

Total interest and dividend income

107,272

100,002

66,679

7.3

%

60.9

%

INTEREST EXPENSE

Deposits

24,723

16,298

2,128

51.7

%

NM

Other borrowings

4,241

5,888

1,097

(28.0

)%

286.4

%

Subordinated notes and debentures

2,142

2,098

...

1,694

2.1

%

26.4

%

Total interest expense

31,106

24,284

4,919

28.1

%

532.3

%

Net interest income

$

76,166

$

75,718

$

61,760

0.6

%

23.3

%

Net interest income for the second quarter of 2023 was $76.2 million, an increase of $448,000, or 0.6%, from the first quarter of 2023.

The increase in net interest income was primarily due to:

  • An increase of $6.8 million in interest income and fees on loans and leases due to higher yields and growth in the loan and lease portfolio; and

  • A decrease of $1.6 million in other borrowings interest expense mainly due to lower average balances of FHLB borrowings.

Partially offset by:

  • An increase of $8.4 million in deposit interest expense mainly due to growth in time deposits and higher rates paid on money market accounts and time deposits.

Tax-equivalent net interest margin for the second quarter of 2023 was 4.33%, a decrease of six basis points compared to the first quarter of 2023. Total net loan accretion income impact on margin contributed three basis points to the net interest margin for the second quarter of 2023 compared to four basis points for the first quarter of 2023.

The average cost of total deposits was 1.70% for the second quarter of 2023, an increase of 55 basis points compared to the first quarter of 2023, as a result of increased cost of interest-bearing deposits and a decrease in average non-interest bearing deposits. Average non-interest-bearing demand deposits were 31.7% of average total deposits for the second quarter of 2023 compared to 36.3% during the first quarter of 2023.

Provision for Credit Losses

The provision for credit losses was $5.8 million for the second quarter of 2023, a decrease of $4.0 million compared to $9.8 million for the first quarter of 2023, which was mainly attributable to lower impairments for individually assessed loans and lower non-performing loans. The provision for credit losses during the quarter is comprised of a provision for loan and lease losses of $6.5 million driven by individually assessed loan impairments and lease growth, partially offset by a recapture for unfunded commitments of $677,000.

Non-interest Income

The following table presents the components of non-interest income for the periods indicated:

June 30, 2023

Three Months Ended

Change from

Recast

June 30,

March 31,

June 30,

March 31,

June 30,

(dollars in thousands)

2023

2023

2022

2023

2022

NON-INTEREST INCOME

Fees and service charges on deposits

$

2,233

$

2,120

$

2,059

5.3

%

8.5

%

Loan servicing revenue

3,377

3,380

3,384

(0.1

)%

(0.2

)%

Loan servicing asset revaluation

(865

)

656

(4,636

)

NM

(81.3

)%

ATM and interchange fees

1,112

1,063

1,131

4.6

%

(1.7

)%

Net realized gains (losses) on securities available-for-sale

—

—

52

0.0

%

(100.0

)%

Change in fair value of equity securities, net

193

350

(697

)

(45.0

)%

NM

Net gains on sales of loans

5,704

5,148

9,983

10.8

%

(42.9

)%

Wealth management and trust income

1,039

924

900

12.5

%

15.5

%

Other non-interest income

1,498

1,504

2,097

(0.3

)%

(28.5

)%

Total non-interest income

$

14,291

$

15,145

$

14,273

(5.6

)%

0.1

%

Non-interest income for the second quarter of 2023 was $14.3 million, a decrease of $854,000, or 5.6%, compared to $15.1 million for the first quarter of 2023.

The decrease in total non-interest income was primarily due to:

  • A decrease of $1.5 million in the valuation of the loan servicing asset reflecting increased prepayments in the second quarter while the prior quarter reflected an improvement in market conditions.

Partially offset by:

  • An increase of $556,000 in the net gain on sales of loans, due to higher volume and net premiums on sale.

During the second quarter of 2023, we sold $85.9 million of U.S. government guaranteed loans compared to $72.2 million during the first quarter of 2023.

Non-interest Expense

The following table presents the components of non-interest expense for the periods indicated:

June 30, 2023

Three Months Ended

Change from

Recast

June 30,

March 31,

June 30,

March 31,

June 30,

(dollars in thousands)

2023

2023

2022

2023

2022

NON-INTEREST EXPENSE

Salaries and employee benefits

$

29,642

$

30,394

$

27,697

(2.5

)%

7.0

%

Occupancy and equipment expense, net

4,404

4,444

4,409

(0.9

)%

(0.1

)%

Impairment charge on assets held for sale

—

20

—

(100.0

)%

0.0

%

Loan and lease related expenses

488

963

942

(49.3

)%

(48.1

)%

Legal, audit and other professional fees

3,675

3,114

1,820

18.0

%

101.9

%

Data processing

4,272

3,783

3,396

12.9

%

25.8

%

Net (gain) loss recognized on other real estate
owned and other related expenses

288

(103

)

158

NM

82.4

%

Other intangible assets amortization expense

1,455

1,455

1,868

0.0

%

(22.1

)%

Other non-interest expense

5,104

4,730

3,295

7.9

%

54.8

%

Total non-interest expense

$

49,328

$

48,800

$

43,585

1.1

%

13.2

%

Non-interest expense for the second quarter of 2023 was $49.3 million, an increase of $528,000, or 1.1%, from $48.8 million for the first quarter of 2023.

The increase in total non-interest expense was primarily due to merger-related expenses, resulting in:

  • An increase of $561,000 in legal, audit and other professional fees; and

  • An increase of $489,000 in data processing.

Partially offset by:

  • A decrease of $752,000 in salaries and employee benefits mainly due to lower payroll taxes and higher deferred salary costs, offset by higher salaries and incentives; and

  • A decrease of $475,000 in loan and lease related expense, due to lower expenses related to government guaranteed loans.

Our efficiency ratio was 52.92% for the second quarter of 2023 compared to 52.10% for the first quarter of 2023.

INCOME TAXES

We recorded income tax expense of $9.2 million during the second quarter of 2023, compared to $8.3 million during the first quarter of 2023. The effective tax rate was 26.1% and 25.7% for the second quarter of 2023 and first quarter of 2023, respectively.

STATEMENTS OF FINANCIAL CONDITION

Total assets were $7.6 billion at June 30, 2023, an increase of $45.3 million compared to $7.5 billion at March 31, 2023.

The current quarter increase was primarily due to:

  • An increase in net loans and leases of $53.0 million primarily due to growth in the commercial loan portfolio and the lease financing portfolio; and

  • An increase in cash and cash equivalents of $36.0 million primarily to support customer activity and complete the acquisition of Inland Bancorp.

Partially offset by:

  • A decrease in securities available-for-sale of $38.7 million, driven mainly by principal payments and changes in market values.

The following table shows our allocation of the originated, purchase credit deteriorated, and non-credit deteriorated loans and leases at the dates indicated:

Recast

June 30, 2023

March 31, 2023

June 30, 2022

(dollars in thousands)

Amount

% of Total

Amount

% of Total

Amount

% of Total

Originated loans and leases

Commercial real estate

$

1,806,531

32.4

%

$

1,749,808

31.7

%

$

1,676,149

32.4

%

Residential real estate

453,880

8.1

%

441,291

8.0

%

401,773

7.8

%

Construction, land development, and
other land

387,623

7.0

%

446,763

8.1

%

434,132

8.4

%

Commercial and industrial

2,086,274

37.4

%

2,061,267

37.4

%

1,873,128

36.2

%

Installment and other

3,582

0.1

%

1,603

0.0

%

927

0.0

%

Leasing financing receivables

604,437

10.9

%

552,174

10.0

%

438,379

8.5

%

Total originated loans and leases

$

5,342,327

95.9

%

$

5,252,906

95.2

%

$

4,824,488

93.3

%

Purchased credit deteriorated loans

Commercial real estate

$

30,724

0.6

%

$

39,000

0.7

%

$

54,739

1.1

%

Residential real estate

26,012

0.5

%

30,070

0.6

%

39,209

0.8

%

Construction, land development, and
other land

320

0.0

%

345

0.0

%

1,181

0.0

%

Commercial and industrial

1,726

0.0

%

1,745

0.0

%

2,557

0.0

%

Installment and other

129

0.0

%

134

0.0

%

155

0.0

%

Total purchased credit deteriorated loans

$

58,911

1.1

%

$

71,294

1.3

%

$

97,841

1.9

%

Acquired non-credit-deteriorated loans and leases

Commercial real estate

$

126,191

2.3

%

$

140,576

2.6

%

$

168,938

3.3

%

Residential real estate

25,055

0.4

%

27,975

0.5

%

40,257

0.8

%

Construction, land development, and
other land

—

0.0

%

—

0.0

%

191

0.0

%

Commercial and industrial

16,750

0.3

%

20,793

0.4

%

31,783

0.6

%

Installment and other

25

0.0

%

85

0.0

%

226

0.0

%

Leasing financing receivables

1,258

0.0

%

1,703

0.0

%

3,992

0.1

%

Total acquired non-credit-deteriorated
loans and leases

$

169,279

3.0

%

$

191,132

3.5

%

$

245,387

4.8

%

Total loans and leases

$

5,570,517

100.0

%

$

5,515,332

100.0

%

$

5,167,716

100.0

%

Allowance for credit losses - loans and leases

(92,665

)

(90,465

)

(74,048

)

Total loans and leases, net of allowance for
credit losses - loans and leases

$

5,477,852

$

5,424,867

$

5,093,668

ASSET QUALITY

Non-Performing Assets

The following table sets forth the amounts of non-performing loans and leases and other real estate owned at the dates indicated:

June 30, 2023

Recast

Change from

(dollars in thousands)

June 30, 2023

March 31, 2023

June 30, 2022

March 31, 2023

June 30, 2022

Non-performing assets:

Non-accrual loans and leases

$

38,273

$

46,536

$

42,979

(17.8

)%

(10.9

)%

Past due loans and leases 90 days or more
and still accruing interest

—

—

—

—%

—%

Total non-performing loans and leases

$

38,273

$

46,536

$

42,979

(17.8

)%

(10.9

)%

Other real estate owned

2,265

3,712

4,749

(39.0

)%

(52.3

)%

Total non-performing assets

$

40,538

$

50,248

$

47,728

(19.3

)%

(15.1

)%

Total non-performing loans and leases as a
percentage of total loans and leases

0.69

%

0.84

%

0.83

%

Total non-performing assets as a percentage
of total assets

0.54

%

0.67

%

0.67

%

Allowance for credit losses - loans and lease
as a percentage of non-performing
loans and leases

242.12

%

194.40

%

172.29

%

Non-performing assets guaranteed by
U.S. government:

Non-accrual loans guaranteed

$

2,472

$

2,335

$

1,731

5.9

%

42.8

%

Past due loans 90 days or more and still
accruing interest guaranteed

—

—

—

—%

—%

Total non-performing loans guaranteed

$

2,472

$

2,335

$

1,731

5.9

%

42.8

%

Total non-performing loans and leases
not guaranteed as a percentage of total
loans and leases

0.64

%

0.80

%

0.80

%

Total non-performing assets not guaranteed
as a percentage of total assets

0.50

%

0.64

%

0.65

%

Variances in non-performing assets were:

  • Non-performing loans and leases were $38.3 million at June 30, 2023, a decrease of $8.3 million from $46.5 million at March 31, 2023, primarily due to the resolution of impaired loans.

  • Other real estate owned was $2.3 million at June 30, 2023, a decrease of $1.4 million from $3.7 million at March 31, 2023, primarily due to sales of properties.

Allowance for Credit Losses ("ACL") - Loans and Leases

The following table presents the balance and activity within the allowance for credit losses - loans and leases for the periods indicated:

Three Months Ended

Recast

June 30,

March 31,

June 30,

(dollars in thousands)

2023

2023

2022

ACL - loans and leases, beginning of period

$

90,465

$

81,924

$

72,107

Provision for credit losses - loans and leases

6,467

9,712

4,105

Net charge-offs - loans and leases

(4,267

)

(1,171

)

(2,164

)

ACL - loans and leases, end of period

$

92,665

$

90,465

$

74,048

Net charge-offs - loans and leases to average total
loans and leases held for investment, net before ACL

0.31

%

0.09

%

0.17

%

Provision for credit losses - loans and leases
to net charge-offs - loans and leases during the period

1.52

x

8.29

x

1.90

x

Net charge-offs of loans and leases during the second quarter of 2023 were $4.3 million, or 0.31% of average loans and leases, on an annualized basis, an increase of $3.1 million compared to $1.2 million, or 0.09% of average loans and leases, during the first quarter of 2023, and an increase of $2.1 million from $2.2 million or 0.17% of average loans and leases from the comparable period a year ago.

Net charge-offs for the second quarter of 2023 included $1.7 million in the unguaranteed portion of U.S. government guaranteed loans, while net charge-offs for the first quarter of 2023 and second quarter of 2022 included $1.1 million and $2.7 million, respectively.

Deposits and Other Liabilities

The following table presents the composition of deposits at the dates indicated:

June 30, 2023

Change from

(dollars in thousands)

June 30, 2023

March 31, 2023

June 30, 2022

March 31, 2023

June 30, 2022

Non-interest-bearing demand deposits

$

1,793,749

$

1,952,045

$

2,180,927

(8.1

)%

(17.8

)%

Interest-bearing checking accounts

530,775

560,837

535,856

(5.4

)%

(0.9

)%

Money market demand accounts

1,600,043

1,453,688

1,323,287

10.1

%

20.9

%

Other savings

562,706

590,231

669,164

(4.7

)%

(15.9

)%

Time deposits (below $250,000)

1,214,717

1,089,785

544,759

11.5

%

123.0

%

Time deposits ($250,000 and above)

215,102

166,066

134,384

29.5

%

60.1

%

Total deposits

$

5,917,092

$

5,812,652

$

5,388,377

1.8

%

9.8

%

Total deposits increased to $5.9 billion at June 30, 2023 compared to $5.8 billion at March 31, 2023. Non-interest-bearing deposits were 30.3% and 33.6% of total deposits at June 30, 2023 and March 31, 2023, respectively. Estimated total uninsured deposits were $1.5 billion and $1.6 billion as of June 30, 2023 and March 31, 2023, and represented 25.9% and 27.9% of total deposits, respectively.

The increase in deposits in the current quarter was due to:

  • An increase in time deposits of $174.0 million, principally due to changes in deposit mix and higher rates offered; and

  • An increase in money market demand accounts of $146.4 million, mainly due to increases in business accounts.

Partially offset by:

  • A decrease in non-interest-bearing demand deposits of $158.3 million, due to higher alternative rates and seasonality.

Total borrowings and other liabilities were $844.7 million at June 30, 2023, a decrease of $77.4 million from $922.0 million at March 31, 2023, primarily driven by maturities of FHLB borrowings.

Stockholders’ Equity

Total stockholders’ equity was $813.9 million at June 30, 2023, an increase of $18.3 million from $795.7 million at March 31, 2023. The increase was primarily due to increased retained earnings due to net income.

The following table presents actual regulatory capital dollar amounts and ratios of the Company and the Bank as of June 30, 2023:

Actual

Minimum Capital
Required

Required to be
Considered
Well Capitalized

June 30, 2023

Amount

Ratio

Amount

Ratio

Amount

Ratio

Total capital to risk weighted assets:

Company

$

959,688

13.52

%

$

567,924

8.00

%

N/A

N/A

Bank

911,331

12.89

%

565,528

8.00

%

$

706,910

10.00

%

Tier 1 capital to risk weighted assets:

Company

$

796,359

11.22

%

$

425,943

6.00

%

N/A

N/A

Bank

823,002

11.64

%

424,146

6.00

%

$

565,528

8.00

%

Common Equity Tier 1 (CET1) to
risk weighted assets:

Company

$

751,359

10.58

%

$

319,457

4.50

%

N/A

N/A

Bank

823,002

11.64

%

318,110

4.50

%

$

459,492

6.50

%

Tier 1 capital to average assets:

Company

$

796,359

10.74

%

$

296,702

4.00

%

N/A

N/A

Bank

823,002

11.12

%

$

296,100

4.00

%

$

370,125

5.00

%

Capital ratios for the period presented are based on the Basel III regulatory capital framework as applied to our current business and operations, and are subject to, among other things, completion and filing of our regulatory reports and ongoing regulatory review and implementation guidance. The ratios above reflect the Company’s election to opt into the regulators’ joint current expected credit losses ("CECL") transition provision, which allows the Company to phase in the capital impact of the adoption of CECL over the next three years beginning January 1, 2022. Accordingly, capital ratios as of June 30, 2023 reflect 50% of the CECL impact.

CECL Adoption

On December 31, 2022, the Company adopted CECL and applied it retrospectively to the period beginning January 1, 2022 using the modified retrospective method of accounting. Results for reporting periods beginning after September 30, 2022 are presented under the new standard, while prior quarters previously reported are recast as if the new standard had been applied since January 1, 2022. Refer to our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on the adoption of the standard.

Conference Call, Webcast and Slide Presentation

We will host a conference call and webcast at 9:00 a.m. Central Time on Friday, July 28, 2023 to discuss our quarterly financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (833) 470-1428; passcode 993003. A recorded replay can be accessed through August 11, 2023 by dialing (866) 813-9403; passcode: 452045.

A slide presentation relating to our second quarter 2023 results will be accessible prior to the conference call. The slide presentation and webcast of the conference call can be accessed on our investor relations website at www.bylinebancorp.com.

About Byline Bancorp, Inc.

Headquartered in Chicago, Byline Bancorp, Inc. is the parent company of Byline Bank, a full service commercial bank serving small- and medium-sized businesses, financial sponsors, and consumers. Byline Bancorp, Inc. completed its acquisition of Inland Bancorp, Inc. on July 1, 2023, with the combined entity operating as Byline Bank and as a result has approximately $8.8 billion in assets and operates 48 total branch locations throughout the Chicago and Milwaukee metropolitan areas. Byline Bank offers a broad range of commercial and retail banking products and services including small ticket equipment leasing solutions and is one of the top Small Business Administration lenders in the United States.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, made through the use of words or phrases such as ‘‘may’’, ‘‘might’’, ‘‘should’’, ‘‘could’’, ‘‘predict’’, ‘‘potential’’, ‘‘believe’’, ‘‘expect’’, ‘‘continue’’, ‘‘will’’, ‘‘anticipate’’, ‘‘seek’’, ‘‘estimate’’, ‘‘intend’’, ‘‘plan’’, ‘‘projection’’, ‘‘would’’, ‘‘annualized’’, "target" and ‘‘outlook’’, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements involve estimates and known and unknown risks, and reflect various assumptions and involve elements of subjective judgment and analysis, which may or may not prove to be correct, and which are subject to uncertainties and contingencies outside the control of Byline and its respective affiliates, directors, employees and other representatives, which could cause actual results to differ materially from those presented in this communication.

No representations, warranties or guarantees are or will be made by Byline as to the reliability, accuracy or completeness of any forward-looking statements contained in this communication or that such forward-looking statements are or will remain based on reasonable assumptions. You should not place undue reliance on any forward-looking statements contained in this communication.

Certain risks and important factors that could affect Byline’s future results are identified in our Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission, including among other things under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement speaks only as of the date on which it is made, and Byline undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise unless required under the federal securities laws.

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

Recast

Recast

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

2023

2023

2022

2022

2022

ASSETS

Cash and due from banks

$

59,564

$

52,725

$

62,274

$

56,546

$

58,844

Interest bearing deposits with other banks

260,621

231,486

117,079

159,744

83,057

Cash and cash equivalents

320,185

284,211

179,353

216,290

141,901

Equity and other securities, at fair value

18,473

8,339

7,989

7,279

7,860

Securities available-for-sale, at fair value

1,125,700

1,164,387

1,174,431

1,181,654

1,273,138

Securities held-to-maturity, at amortized cost

2,158

2,704

2,705

3,877

3,880

Restricted stock, at cost

24,377

38,777

28,202

27,077

30,002

Loans held for sale

25,995

28,379

47,823

33,975

17,284

Loans and leases:

Loans and leases

5,570,517

5,515,332

5,421,258

5,275,126

5,167,716

Allowance for credit losses - loans and leases

(92,665

)

(90,465

)

(81,924

)

(79,704

)

(74,048

)

Net loans and leases

5,477,852

5,424,867

5,339,334

5,195,422

5,093,668

Servicing assets, at fair value

21,715

20,944

19,172

21,127

22,155

Premises and equipment, net

56,304

56,098

56,798

59,049

60,773

Other real estate owned, net

2,265

3,712

4,717

4,402

4,749

Goodwill and other intangible assets, net

155,977

157,432

158,887

160,484

162,094

Bank-owned life insurance

83,222

82,693

82,093

81,592

81,100

Deferred tax assets, net

66,895

64,918

68,213

95,831

82,412

Accrued interest receivable and other assets

194,572

192,885

193,224

179,218

143,014

Total assets

$

7,575,690

$

7,530,346

$

7,362,941

$

7,267,277

$

7,124,030

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Non-interest-bearing demand deposits

$

1,793,749

$

1,952,045

$

2,138,645

$

2,142,183

$

2,180,927

Interest-bearing deposits

4,123,343

3,860,607

3,556,476

3,470,273

3,207,450

Total deposits

5,917,092

5,812,652

5,695,121

5,612,456

5,388,377

Other borrowings

574,922

662,810

640,399

653,954

748,092

Subordinated notes, net

73,778

73,735

73,691

73,648

73,604

Junior subordinated debentures issued to
capital trusts, net

37,557

37,442

37,338

37,232

37,123

Accrued expenses and other liabilities

158,399

148,057

150,576

154,182

121,186

Total liabilities

6,761,748

6,734,696

6,597,125

6,531,472

6,368,382

STOCKHOLDERS’ EQUITY

Preferred stock

—

—

—

—

—

Common stock

391

390

389

389

388

Additional paid-in capital

599,718

598,103

598,297

597,049

595,938

Retained earnings

379,078

356,365

335,794

314,800

297,765

Treasury stock

(50,383

)

(51,066

)

(51,114

)

(51,535

)

(47,181

)

Accumulated other comprehensive loss, net of tax

(114,862

)

(108,142

)

(117,550

)

(124,898

)

(91,262

)

Total stockholders’ equity

813,942

795,650

765,816

735,805

755,648

Total liabilities and stockholders’ equity

$

7,575,690

$

7,530,346

$

7,362,941

$

7,267,277

$

7,124,030

BYLINE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended

Six Months Ended

Recast

Recast

Recast

(dollars in thousands,

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

except per share data)

2023

2023

2022

2022

2022

2023

2022

INTEREST AND DIVIDEND INCOME

Interest and fees on loans and leases

$

99,134

$

92,343

$

85,720

$

72,635

$

59,919

$

191,477

$

115,057

Interest on securities

6,559

6,600

6,569

6,402

6,264

13,159

12,419

Other interest and dividend income

1,579

1,059

1,515

626

496

2,638

616

Total interest and dividend income

107,272

100,002

93,804

79,663

66,679

207,274

128,092

INTEREST EXPENSE

Deposits

24,723

16,298

10,610

5,971

2,128

41,021

3,215

Other borrowings

4,241

5,888

4,598

3,232

1,097

10,129

1,492

Subordinated notes and debentures

2,142

2,098

1,992

1,825

1,694

4,240

3,294

Total interest expense

31,106

24,284

17,200

11,028

4,919

55,390

8,001

Net interest income

76,166

75,718

76,604

68,635

61,760

151,884

120,091

PROVISION FOR CREDIT LOSSES

5,790

9,825

5,826

7,208

4,286

15,615

10,845

Net interest income after
provision for
credit losses

70,376

65,893

70,778

61,427

57,474

136,269

109,246

NON-INTEREST INCOME

Fees and service charges on deposits

2,233

2,120

2,081

2,128

2,059

4,353

3,943

Loan servicing revenue

3,377

3,380

3,293

3,422

3,384

6,757

6,764

Loan servicing asset revaluation

(865

)

656

(3,534

)

(2,342

)

(4,636

)

(209

)

(5,867

)

ATM and interchange fees

1,112

1,063

1,250

1,007

1,131

2,175

2,180

Net realized gains (losses) on securities
available-for-sale

—

—

—

(2

)

52

—

52

Change in fair value of equity
securities, net

193

350

710

(581

)

(697

)

543

(732

)

Net gains on sales of loans

5,704

5,148

5,509

5,580

9,983

10,852

20,810

Wealth management and trust income

1,039

924

864

995

900

1,963

1,948

Other non-interest income

1,498

1,504

1,282

1,836

2,097

3,002

4,718

Total non-interest income

14,291

15,145

11,455

12,043

14,273

29,436

33,816

NON-INTEREST EXPENSE

Salaries and employee benefits

29,642

30,394

31,808

29,587

27,697

60,036

56,656

Occupancy and equipment expense,
net

4,404

4,444

3,532

3,919

4,409

8,848

9,537

Impairment charge on assets
held for sale

—

20

372

—

—

20

—

Loan and lease related expenses

488

963

1,126

530

942

1,451

51

Legal, audit, and other
professional fees

3,675

3,114

3,204

2,733

1,820

6,789

4,420

Data processing

4,272

3,783

3,406

3,370

3,396

8,055

6,582

Net (gain) loss recognized on other real
estate owned and other related
expenses

288

(103

)

221

275

158

185

212

Other intangible assets amortization
expense

1,455

1,455

1,596

1,611

1,868

2,910

3,464

Other non-interest expense

5,104

4,730

5,235

4,016

3,295

9,834

6,619

Total non-interest expense

49,328

48,800

50,500

46,041

43,585

98,128

87,541

INCOME BEFORE PROVISION FOR
INCOME TAXES

35,339

32,238

31,733

27,429

28,162

67,577

55,521

PROVISION FOR INCOME TAXES

9,232

8,293

7,366

7,020

6,382

17,525

12,343

NET INCOME

26,107

23,945

24,367

20,409

21,780

50,052

43,178

Dividends on preferred shares

—

—

—

—

—

—

196

INCOME AVAILABLE TO COMMON
STOCKHOLDERS

$

26,107

$

23,945

$

24,367

$

20,409

$

21,780

$

50,052

$

42,982

EARNINGS PER COMMON SHARE

Basic

$

0.70

$

0.65

$

0.66

$

0.55

$

0.59

$

1.35

$

1.16

Diluted

$

0.70

$

0.64

$

0.65

$

0.55

$

0.58

$

1.34

$

1.14

BYLINE BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA (unaudited)

As of or For the Three Months Ended

As of or For the Six Months Ended

Recast

Recast

Recast

(dollars in thousands, except share

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

and per share data)

2023

2023

2022

2022

2022

2023

2022

Earnings per Common Share

Basic earnings per common share

$

0.70

$

0.65

$

0.66

$

0.55

$

0.59

$

1.35

$

1.16

Diluted earnings per common share

$

0.70

$

0.64

$

0.65

$

0.55

$

0.58

$

1.34

$

1.14

Adjusted diluted earnings per
common share(1)(3)

$

0.73

$

0.65

$

0.67

$

0.55

$

0.58

$

1.38

$

1.14

Weighted average common shares
outstanding (basic)

37,034,626

36,955,085

36,856,221

36,851,973

37,064,795

36,995,075

37,093,816

Weighted average common shares
outstanding (diluted)

37,337,906

37,539,912

37,360,113

37,371,159

37,612,268

37,444,381

37,740,682

Common shares outstanding

37,752,002

37,713,427

37,492,775

37,465,902

37,669,102

37,752,002

37,669,102

Cash dividends per common share

$

0.09

$

0.09

$

0.09

$

0.09

$

0.09

$

0.18

$

0.18

Dividend payout ratio on
common stock

12.86

%

14.06

%

13.85

%

16.36

%

15.52

%

13.43

%

15.79

%

Tangible book value per
common share(1)

$

17.43

$

16.92

$

16.19

$

15.36

$

15.76

$

17.43

$

15.76

Key Ratios and Performance Metrics
(annualized where applicable)

Net interest margin, fully taxable
equivalent (1)(4)

4.33

%

4.39

%

4.40

%

4.04

%

3.78

%

4.36

%

3.79

%

Average cost of deposits

1.70

%

1.15

%

0.73

%

0.43

%

0.16

%

1.43

%

0.12

%

Efficiency ratio(2)

52.92

%

52.10

%

55.53

%

55.07

%

54.87

%

52.51

%

54.63

%

Adjusted efficiency ratio(1)(2)(3)

51.39

%

51.54

%

54.50

%

55.07

%

54.87

%

51.47

%

54.63

%

Non-interest income to total
revenues(1)

15.80

%

16.67

%

13.01

%

14.93

%

18.77

%

16.23

%

21.97

%

Non-interest expense to average assets

2.67

%

2.69

%

2.76

%

2.56

%

2.51

%

2.68

%

2.58

%

Adjusted non-interest expense to
average assets(1)(3)

2.60

%

2.67

%

2.71

%

2.56

%

2.51

%

2.63

%

2.58

%

Return on average stockholders' equity

12.99

%

12.38

%

12.92

%

10.57

%

11.35

%

12.69

%

10.94

%

Adjusted return on average
stockholders' equity(1)(3)

13.56

%

12.62

%

13.34

%

10.57

%

11.35

%

13.10

%

10.94

%

Return on average assets

1.41

%

1.32

%

1.33

%

1.13

%

1.25

%

1.37

%

1.27

%

Adjusted return on average assets(1)(3)

1.48

%

1.35

%

1.37

%

1.13

%

1.25

%

1.41

%

1.27

%

Pre-tax pre-provision return on
average assets(1)

2.23

%

2.32

%

2.05

%

1.93

%

1.87

%

2.27

%

1.96

%

Adjusted pre-tax pre-provision return
on average assets(1)(3)

2.30

%

2.35

%

2.10

%

1.93

%

1.87

%

2.33

%

1.96

%

Return on average tangible common
stockholders' equity(1)

16.78

%

16.20

%

17.21

%

14.17

%

15.31

%

16.50

%

14.65

%

Adjusted return on average tangible
common stockholders' equity(1)(3)

17.50

%

16.49

%

17.75

%

14.17

%

15.31

%

17.01

%

14.65

%

Non-interest-bearing deposits to
total deposits

30.31

%

33.58

%

37.55

%

38.17

%

40.47

%

30.31

%

40.47

%

Loans and leases held for sale and
loans and lease held for
investment to total deposits

94.58

%

95.37

%

96.03

%

94.59

%

96.23

%

94.58

%

96.23

%

Deposits to total liabilities

87.51

%

86.31

%

86.33

%

85.93

%

84.61

%

87.51

%

84.61

%

Deposits per branch

$

155,713

$

152,965

$

149,872

$

147,696

$

141,799

$

155,713

$

141,799

Asset Quality Ratios

Non-performing loans and leases to
total loans and leases held for
investment, net before ACL

0.69

%

0.84

%

0.66

%

0.80

%

0.83

%

0.69

%

0.83

%

ACL to total loans and leases held for
investment, net before ACL

1.66

%

1.64

%

1.51

%

1.51

%

1.43

%

1.66

%

1.43

%

Net charge-offs to average total loans
and leases held for investment,
net before ACL - loans and leases

0.31

%

0.09

%

0.24

%

0.14

%

0.17

%

0.20

%

0.12

%

Capital Ratios

Common equity to total assets

10.74

%

10.57

%

10.40

%

10.12

%

10.61

%

10.74

%

10.61

%

Tangible common equity to
tangible assets(1)

8.87

%

8.66

%

8.42

%

8.10

%

8.53

%

8.87

%

8.53

%

Leverage ratio

10.74

%

10.46

%

10.29

%

10.30

%

10.34

%

10.74

%

10.34

%

Common equity tier 1 capital ratio

10.58

%

10.27

%

10.20

%

10.24

%

10.26

%

10.58

%

10.26

%

Tier 1 capital ratio

11.22

%

10.90

%

10.85

%

10.91

%

10.95

%

11.22

%

10.95

%

Total capital ratio

13.52

%

13.19

%

13.00

%

13.02

%

13.09

%

13.52

%

13.09

%

(1)

Represents a non-GAAP financial measure. See "Reconciliation of non-GAAP Financial Measures" for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure.

(2)

Represents non-interest expense less amortization of intangible assets divided by net interest income and non-interest income.

(3)

Calculation excludes impairment charges on asset held for sale and merger-related expenses.

(4)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

BYLINE BANCORP, INC. AND SUBSIDIARIES

YEAR-TO-DATE STATEMENT OF AVERAGE INTEREST-EARNING ASSETS AND AVERAGE INTERST-BEARING LIABILITIES (unaudited)

For the Six Months Ended

June 30, 2023

Recast June 30, 2022

(dollars in thousands)

Average
Balance(5)

Interest
Inc / Exp

Average
Yield /
Rate

Average
Balance(5)

Interest
Inc / Exp

Average
Yield /
Rate

ASSETS

Cash and cash equivalents

$

116,394

$

1,483

2.57

%

$

70,404

$

103

0.29

%

Loans and leases(1)

5,510,124

191,477

7.01

%

4,839,266

115,057

4.79

%

Taxable securities

1,263,010

12,755

2.04

%

1,335,218

11,150

1.68

%

Tax-exempt securities(2)

151,509

1,974

2.63

%

169,107

2,255

2.69

%

Total interest-earning assets

$

7,041,037

$

207,689

5.95

%

$

6,413,995

$

128,565

4.04

%

Allowance for credit losses - loans and leases

(88,586

)

(70,302

)

All other assets

422,236

489,070

TOTAL ASSETS

$

7,374,687

$

6,832,763

LIABILITIES AND STOCKHOLDERS’
EQUITY

Deposits

Interest checking

$

573,342

$

4,669

1.64

%

$

597,665

$

593

0.20

%

Money market accounts

1,500,260

18,527

2.49

%

1,281,519

1,668

0.26

%

Savings

594,316

447

0.15

%

657,155

159

0.05

%

Time deposits

1,148,545

17,378

3.05

%

644,543

795

0.25

%

Total interest-bearing deposits

3,816,463

41,021

2.17

%

3,180,882

3,215

0.20

%

Other borrowings

541,249

10,093

3.76

%

394,385

1,478

0.76

%

Federal funds purchased

1,381

36

5.30

%

1,271

14

2.32

%

Subordinated notes and debentures

111,178

4,240

7.69

%

110,570

3,294

6.01

%

Total borrowings

653,808

14,369

4.43

%

506,226

4,786

1.91

%

Total interest-bearing liabilities

$

4,470,271

$

55,390

2.50

%

$

3,687,108

$

8,001

0.44

%

Non-interest-bearing demand deposits

1,961,945

2,256,778

Other liabilities

147,130

93,166

Total stockholders’ equity

795,341

795,711

TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY

$

7,374,687

$

6,832,763

Net interest spread(3)

3.45

%

3.60

%

Net interest income, fully
taxable equivalent

$

152,299

$

120,564

Net interest margin, fully
taxable equivalent(2)(4)

4.36

%

3.79

%

Less: Tax-equivalent adjustment

415

0.01

%

473

0.01

%

Net interest income

$

151,884

$

120,091

Net interest margin(4)

4.35

%

3.78

%

Net loan accretion impact on margin

$

1,340

0.04

%

$

2,815

0.09

%

(1)

Loan and lease balances are net of deferred origination fees and costs and initial direct costs. Non-accrual loans and leases are included in total loan and lease balances.

(2)

Interest income and rates include the effects of a tax equivalent adjustment to adjust tax exempt investment income on tax exempt investment securities to a fully taxable basis, assuming a federal income tax rate of 21%.

(3)

Represents the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.

(4)

Represents net interest income (annualized) divided by total average earning assets.

(5)

Average balances are average daily balances.

BYLINE BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited)

Non-GAAP Financial Measures

This release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These measures include adjusted net income, adjusted diluted earnings per share, adjusted efficiency ratio, adjusted non-interest expense to average assets, tax-equivalent net interest margin, total revenue, non-interest income to total revenues, adjusted return on average stockholders’ equity, adjusted return on average assets, pre-tax pre-provision return on average assets, adjusted pre-tax pre-provision return on average assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common stockholders' equity, and adjusted return on average tangible common stockholders' equity. Management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, management acknowledges that our non-GAAP financial measures have a number of limitations. As such, these disclosures should not be viewed as a substitute for results determined in accordance with GAAP financial measures that we and other companies use. Management also uses these measures for peer comparison. See below in the financial schedules included in this press release for a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. Additionally, please refer to the Company’s Annual Report on Form 10-K for the detailed definitions of these non-GAAP financial measures.

As of or For the Three Months Ended

As of or For the Six Months Ended

Recast

Recast

Recast

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

(dollars in thousands, except per share data)

2023

2023

2022

2022

2022

2023

2022

Net income and earnings per share
excluding significant items

Reported Net Income

$

26,107

$

23,945

$

24,367

$

20,409

$

21,780

$

50,052

$

43,178

Significant items:

Impairment charges on assets held
for sale

—

20

372

—

—

20

—

Merger-related expenses

1,391

489

538

—

—

1,880

—

Tax benefit

(230

)

(56

)

(118

)

—

—

(286

)

—

Adjusted Net Income

$

27,268

$

24,398

$

25,159

$

20,409

$

21,780

$

51,666

$

43,178

Reported Diluted Earnings per Share

$

0.70

$

0.64

$

0.65

$

0.55

$

0.58

$

1.34

$

1.14

Significant items:

Impairment charges on assets held
for sale

—

—

0.01

—

—

—

—

Merger-related expenses

0.04

0.01

0.01

—

—

0.05

—

Tax benefit

(0.01

)

—

—

—

—

(0.01

)

—

Adjusted Diluted Earnings per Share

$

0.73

$

0.65

$

0.67

$

0.55

$

0.58

$

1.38

$

1.14

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

As of or For the Three Months Ended

As of or For the Six Months Ended

Recast

Recast

Recast

(dollars in thousands, except per share data,

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

ratios annualized, where applicable)

2023

2023

2022

2022

2022

2023

2022

Adjusted non-interest expense:

Non-interest expense

$

49,328

$

48,800

$

50,500

$

46,041

$

43,585

$

98,128

$

87,541

Less: Significant items

Impairment charges on assets held for sale

—

20

372

—

—

20

—

Merger-related expenses

1,391

489

538

—

—

1,880

—

Adjusted non-interest expense

$

47,937

$

48,291

$

49,590

$

46,041

$

43,585

$

96,228

$

87,541

Adjusted non-interest expense excluding
amortization of intangible assets:

Adjusted non-interest expense

$

47,937

$

48,291

$

49,590

$

46,041

$

43,585

$

96,228

$

87,541

Less: Amortization of intangible assets

1,455

1,455

1,596

1,611

1,868

2,910

3,464

Adjusted non-interest expense excluding
amortization of intangible assets

$

46,482

$

46,836

$

47,994

$

44,430

$

41,717

$

93,318

$

84,077

Pre-tax pre-provision net income:

Pre-tax income

$

35,339

$

32,238

$

31,733

$

27,429

$

28,162

$

67,577

$

55,521

Add: Provision for credit losses

5,790

9,825

5,826

7,208

4,286

15,615

10,845

Pre-tax pre-provision net income

$

41,129

$

42,063

$

37,559

$

34,637

$

32,448

$

83,192

$

66,366

Adjusted pre-tax pre-provision net income:

Pre-tax pre-provision net income

$

41,129

$

42,063

$

37,559

$

34,637

$

32,448

$

83,192

$

66,366

Add: Impairment charges on assets held for sale

—

20

372

—

—

20

—

Add: Merger-related expenses

1,391

489

538

—

—

1,880

—

Adjusted pre-tax pre-provision net income

$

42,520

$

42,572

$

38,469

$

34,637

$

32,448

$

85,092

$

66,366

Tax equivalent net interest income

Net interest income

$

76,166

$

75,718

$

76,604

$

68,635

$

61,760

$

151,884

$

120,091

Add: Tax-equivalent adjustment

207

208

214

228

237

415

473

Net interest income, fully taxable equivalent

$

76,373

$

75,926

$

76,818

$

68,863

$

61,997

$

152,299

$

120,564

Total revenue:

Net interest income

$

76,166

$

75,718

$

76,604

$

68,635

$

61,760

$

151,884

$

120,091

Add: Non-interest income

14,291

15,145

11,455

12,043

14,273

29,436

33,816

Total revenue

$

90,457

$

90,863

$

88,059

$

80,678

$

76,033

$

181,320

$

153,907

Tangible common stockholders' equity:

Total stockholders' equity

$

813,942

$

795,650

$

765,816

$

735,805

$

755,648

$

813,942

$

755,648

Less: Preferred stock

—

—

—

—

—

—

—

Less: Goodwill and other intangibles

155,977

157,432

158,887

160,484

162,094

155,977

162,094

Tangible common stockholders' equity

$

657,965

$

638,218

$

606,929

$

575,321

$

593,554

$

657,965

$

593,554

Tangible assets:

Total assets

$

7,575,690

$

7,530,346

$

7,362,941

$

7,267,277

$

7,124,030

$

7,575,690

$

7,124,030

Less: Goodwill and other intangibles

155,977

157,432

158,887

160,484

162,094

155,977

162,094

Tangible assets

$

7,419,713

$

7,372,914

$

7,204,054

$

7,106,793

$

6,961,936

$

7,419,713

$

6,961,936

Average tangible common stockholders'
equity:

Average total stockholders' equity

$

806,272

$

784,289

$

748,292

$

765,821

$

769,658

$

795,341

$

795,711

Less: Average preferred stock

—

—

—

—

—

—

4,959

Less: Average goodwill and other
intangibles

156,766

158,181

159,680

161,292

163,068

157,469

163,948

Average tangible common stockholders'
equity

$

649,506

$

626,108

$

588,612

$

604,529

$

606,590

$

637,872

$

626,804

Average tangible assets:

Average total assets

$

7,403,899

$

7,345,151

$

7,266,053

$

7,137,472

$

6,966,564

$

7,374,687

$

6,832,763

Less: Average goodwill and other
intangibles

156,766

158,181

159,680

161,292

163,068

157,469

163,948

Average tangible assets

$

7,247,133

$

7,186,970

$

7,106,373

$

6,976,180

$

6,803,496

$

7,217,218

$

6,668,815

Tangible net income available to common
stockholders:

Net income available to common
stockholders

$

26,107

$

23,945

$

24,367

$

20,409

$

21,780

$

50,052

$

42,982

Add: After-tax intangible asset amortization

1,067

1,066

1,170

1,181

1,369

2,133

2,539

Tangible net income available to common
stockholders

$

27,174

$

25,011

$

25,537

$

21,590

$

23,149

$

52,185

$

45,521

Adjusted tangible net income available
to common stockholders:

Tangible net income available to common
stockholders

$

27,174

$

25,011

$

25,537

$

21,590

$

23,149

$

52,185

$

45,521

Impairment charges on assets held for sale

—

20

372

—

—

20

—

Merger-related expenses

1,391

489

538

—

—

1,880

—

Tax benefit on significant items

(230

)

(56

)

(118

)

—

—

(286

)

—

Adjusted tangible net income available to
common stockholders

$

28,335

$

25,464

$

26,329

$

21,590

$

23,149

$

53,799

$

45,521

BYLINE BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) (unaudited)

As of or For the Three Months Ended

As of or For the Six Months Ended

Recast

Recast

Recast

(dollars in thousands, except share and per share

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

data, ratios annualized, where applicable)

2023

2023

2022

2022

2022

2023

2022

Pre-tax pre-provision return on average assets:

Pre-tax pre-provision net income

$

41,129

$

42,063

$

37,559

$

34,637

$

32,448

$

83,192

$

66,366

Average total assets

7,403,899

7,345,151

7,266,053

7,137,472

6,966,564

7,374,687

6,832,763

Pre-tax pre-provision return on average assets

2.23

%

2.32

%

2.05

%

1.93

%

1.87

%

2.27

%

1.96

%

Adjusted pre-tax pre-provision return on average
assets:

Adjusted pre-tax pre-provision net income

$

42,520

$

42,572

$

38,469

$

34,637

$

32,448

$

85,092

$

66,366

Average total assets

7,403,899

7,345,151

7,266,053

7,137,472

6,966,564

7,374,687

6,832,763

Adjusted pre-tax pre-provision return on average
assets

2.30

%

2.35

%

2.10

%

1.93

%

1.87

%

2.33

%

1.96

%

Net interest margin, fully taxable equivalent

Net interest income, fully taxable equivalent

$

76,373

$

75,926

$

76,818

$

68,863

$

61,997

$

152,299

$

120,564

Total average interest-earning assets

7,072,581

7,009,144

6,922,889

6,763,916

6,573,352

7,041,037

6,413,995

Net interest margin, fully taxable equivalent

4.33

%

4.39

%

4.40

%

4.04

%

3.78

%

4.36

%

3.79

%

Non-interest income to total revenues:

Non-interest income

$

14,291

$

15,145

$

11,455

$

12,043

$

14,273

$

29,436

$

33,816

Total revenues

90,457

90,863

88,059

80,678

76,033

181,320

153,907

Non-interest income to total revenues

15.80

%

16.67

%

13.01

%

14.93

%

18.77

%

16.23

%

21.97

%

Adjusted non-interest expense to average assets:

Adjusted non-interest expense

$

47,937

$

48,291

$

49,590

$

46,041

$

43,585

$

96,228

$

87,541

Average total assets

7,403,899

7,345,151

7,266,053

7,137,472

6,966,564

7,374,687

6,832,763

Adjusted non-interest expense to average assets

2.60

%

2.67

%

2.71

%

2.56

%

2.51

%

2.63

%

2.58

%

Adjusted efficiency ratio:

Adjusted non-interest expense excluding
amortization of intangible assets

$

46,482

$

46,836

$

47,994

$

44,430

$

41,717

$

93,318

$

84,077

Total revenues

90,457

90,863

88,059

80,678

76,033

181,320

153,907

Adjusted efficiency ratio

51.39

%

51.54

%

54.50

%

55.07

%

54.87

%

51.47

%

54.63

%

Adjusted return on average assets:

Adjusted net income

$

27,268

$

24,398

$

25,159

$

20,409

$

21,780

$

51,666

$

43,178

Average total assets

7,403,899

7,345,151

7,266,053

7,137,472

6,966,564

7,374,687

6,832,763

Adjusted return on average assets

1.48

%

1.35

%

1.37

%

1.13

%

1.25

%

1.41

%

1.27

%

Adjusted return on average stockholders' equity:

Adjusted net income

$

27,268

$

24,398

$

25,159

$

20,409

$

21,780

$

51,666

$

43,178

Average stockholders' equity

806,272

784,289

748,292

765,821

769,658

795,341

795,711

Adjusted return on average stockholders' equity

13.56

%

12.62

%

13.34

%

10.57

%

11.35

%

13.10

%

10.94

%

Tangible common equity to tangible assets:

Tangible common equity

$

657,965

$

638,218

$

606,929

$

575,321

$

593,554

$

657,965

$

593,554

Tangible assets

7,419,713

7,372,914

7,204,054

7,106,793

6,961,936

7,419,713

6,961,936

Tangible common equity to tangible assets

8.87

%

8.66

%

8.42

%

8.10

%

8.53

%

8.87

%

8.53

%

Return on average tangible common stockholders'
equity:

Tangible net income available to common
stockholders

$

27,174

$

25,011

$

25,537

$

21,590

$

23,149

$

52,185

$

45,521

Average tangible common stockholders' equity

649,506

626,108

588,612

604,529

606,590

637,872

626,804

Return on average tangible common
stockholders' equity

16.78

%

16.20

%

17.21

%

14.17

%

15.31

%

16.50

%

14.65

%

Adjusted return on average tangible common
stockholders' equity:

Adjusted tangible net income available to
common stockholders

$

28,335

$

25,464

$

26,329

$

21,590

$

23,149

$

53,799

$

45,521

Average tangible common stockholders' equity

649,506

626,108

588,612

604,529

606,590

637,872

626,804

Adjusted return on average tangible common
stockholders' equity

17.50

%

16.49

%

17.75

%

14.17

%

15.31

%

17.01

%

14.65

%

Tangible book value per share:

Tangible common equity

$

657,965

$

638,218

$

606,929

$

575,321

$

593,554

$

657,965

$

593,554

Common shares outstanding

37,752,002

37,713,427

37,492,775

37,465,902

37,669,102

37,752,002

37,669,102

Tangible book value per share

$

17.43

$

16.92

$

16.19

$

15.36

$

15.76

$

17.43

$

15.76

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727800032/en/

Contacts

Investors:
Brooks Rennie
Investor Relations Director
312-660-5805
brennie@bylinebank.com

Media:
Erin O’Neill
Marketing Director
773-475-2901
eoneill@bylinebank.com

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